Although the major lenders could afford to be a little smug on the global stage, their popularity with the home-owning public in Australia is waning as mortgage rates rise.

Executives from all four banks were coy about whether they would pass on the full rate rises over the next 12 months when asked at a conference in Hong Kong for fund managers organised by investment bank Credit Suisse.

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There was no mention of reports she had told investors the bank was under pressure to lift the interest rates it charges by 30 to 40 basis points, or comments by the bank’s chairman, Ted Evans, who said rates would continue to rise for the next five years.

Mr Clyne took the moral high ground. “NAB’s position has been pretty clear," he said. “We have had the lowest mortgage rate in the market for nine months. We will make the assessments as we go but our credentials on fair value are pretty strong."

Mr Hodges made no forecasts about rates, but said most of ANZ’s customers kept paying the same amount off their mortgage when rates went up, suggesting they could afford future increases.

“There is a bit of insulation already in the sector for three-quarters of the customers," he said. “As interest rates come up again they don’t have to pay more.

“There is funding pressure there but we are managing that. We will just watch it as we go."

Mr Norris said although CBA’s funding costs would fall, they would not return to pre-crisis levels as offshore and wholesale funding costs had risen.

“Rates increased dramatically, very quickly and without warning," he said. “It does not pay us to look too far into the future."

As unpopular as it might be, banks will increase rates to meet higher funding costs and a tougher regulatory environment. However, the Reserve Bank suggested this week that the banks may be partly to blame because of a war over retail deposits in recent months. Most banks said that was easing.

A key concern for banks is a change to capital requirements as part of post-crisis changes to global financial regulation. But all four executives in Hong Kong said they were less worried since consultations with the federal government and the Australian Prudential Regulation Authority.